 By Alan Hall, originally published in the May 2011 Socionomist |
Outside the Middle East, we have seen a notable change toward positive social mood, yet some expressions of mood have not kept pace. For example, see the falling Well-Being Index featured in the April issue. Also, housing prices continue to sag, various indexes of consumer confidence lag the stock market, and Bloomberg’s Consumer Comfort Index remains near 20-year lows. The mood picture seems mixed. Why is this?
Figure 1
Figure 1, from Robert Prechter’s presentation at the April 2011 Socionomics Summit, illustrates the influence of social mood on social expression. Prechter said:
This visual graphic illustrates the idea that as soon as social mood turns up at a major bottom, it doesn’t mean everybody is suddenly happy. It means [that] their mood is a little bit less negative. … There are always actions on both sides. The question is, “What is the intensity and what is the quantity?”
On this particular illustration, the blue bar is fluctuating in a fractal form up and down this graphic. At extremes of Primary degree, it’s a certain distance up; Cycle degree, it’s even higher; Supercycle, even higher; Grand Supercycle, even higher; and so on. And the same thing is true at the bottoms. But at no time is there a one-sided expression of happy social mood or unhappy social mood. There’s always a mix. The ratio between them, the balance of that expression, is always changing in that manner.
In November 1954, the stock market approximated the social mood position illustrated by the horizontal bar in Figure 1; according to the Elliott Wave model, the DJIA was at the structural midpoint of its 1932–2000 rise. The lead article in the August 2009 issue of The Socionomist, “The Wave Principle Delineates Phases of Social Caution and Ebullience,” described this midpoint in mood:
In the early stages of a new rising trend, people still feel the fear and caution of the previous downtrend, albeit to a lesser extent. … The boundary between the caution phase and the transition phase occurs at the center of wave three. Like the peaks of fifth waves, third-wave midpoints are watershed moments at all degrees. This is the psychological “point of recognition” within a five-wave advance, the point when people are no longer becoming less pessimistic and start becoming more optimistic.
If EWI’s Elliott wave labels are correct, social mood will soon decline to the structural midpoint of a Primary-degree C wave. As mood—represented by the horizontal bar in Figure 1—descends, today’s predominately optimistic mix of social expression will give way to a predominately pessimistic mix.
Summary
As during the 2007–2009 downtrend, predominant social expressions reflect the 2009–2011 uptrend in mood. Such activity is hard to qualify and quantify, but as always, we have the stock market, which serves as the most sensitive indicator of collective social expression.■
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Most economists, historians and sociologists
presume that events determine society’s mood. But socionomics hypothesizes
the opposite: that social mood regulates the character of social events. The
events of history—such as investment booms and busts, political events,
macroeconomic trends and even peace and war—are the products of a naturally
occurring pattern of social-mood fluctuation. Such events, therefore, are not
randomly distributed, as is commonly believed, but are in fact probabilistically
predictable. Socionomics also posits that the stock market is the best available
meter of a society’s aggregate mood, that news is irrelevant to social
mood, and that financial and economic decision-making are fundamentally different
in that financial decisions are motivated by the herding impulse while economic
choices are guided by supply and demand. For more information about socionomic
theory, see (1) the text, The
Wave Principle of Human Social Behavior © 1999, by Robert Prechter;
(2) the introductory documentary History's
Hidden Engine; (3) the video Toward
a New Science of Social Prediction, Prechter’s 2004 speech before
the London School of Economics in which he presents evidence to support his
socionomic hypothesis; and (4) the Socionomics Institute’s website, www.socionomics.net.
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The Socionomist enables you to see trend-shaping waves of social mood, as reflected by the stock market — and capitalize on them. The June issue looks at phases of social mood and features a “Research Roundup,” which highlights five academic studies that shine a light on important aspects of socionomic theory. Mood Riffs topics include “quiet luxury,” loneliness, the Writers Guild strike and efforts by countries to trade in currencies other than the U.S. dollar. Read the June issue when you become a Socionomics Premier Member.
